What changed
RBI has explicitly added bullion dealers (including sub-dealers) and jewellers to the list of high-risk customer categories for RRBs. These accounts now require enhanced due diligence and intensified transaction monitoring, with a mandate to file Suspicious Transaction Reports (STRs) to FIU-IND for any suspicious activity.
What it means for you
RRBs must update their KYC/AML policies to treat bullion and jewellery accounts as high risk, applying stricter verification and monitoring. This increases compliance burden but reduces money laundering risks. Non-compliance may attract penalties under the Banking Regulation Act and PMLA rules.
What you must do
- Categorize all bullion dealer and jeweller accounts as high risk immediately.
- Implement enhanced due diligence measures for these accounts as per existing KYC guidelines.
- Set up intensified transaction monitoring for these high-risk accounts.
- Train staff to identify suspicious transactions and file STRs with FIU-IND promptly.
- Acknowledge receipt of this circular to your respective RBI Regional Office.
Who it affects
All Regional Rural Banks (RRBs), Compliance Officers and Principal Officers of RRBs, Bullion dealers, sub-dealers, and jewellers with accounts in RRBs
Why are bullion dealers and jewellers now considered high risk?
Cash-intensive businesses like bullion and jewellery trade are vulnerable to money laundering, so RBI mandates enhanced due diligence and monitoring for such accounts.
What happens if an RRB fails to comply with these guidelines?
Non-compliance may attract penalties under Section 35A of the Banking Regulation Act, 1949 and the Prevention of Money-laundering Rules, 2005.
Do these guidelines apply to all existing bullion dealer accounts?
Yes, RRBs must re-categorize all existing bullion dealer and jeweller accounts as high risk and apply enhanced due diligence and monitoring.